Banking on it

'Merchant banker' has a rather fruity meaning in modern Cockney rhyming slang - for those unfamiliar with contemporary English argot, a brief visit to any of the major internet search engines should assist.

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The phrase well pre-dates the onset of the global financial crisis, the ensuing row in the UK over banker bonuses, and is certainly older than the current debacle around the rigging of the London Interbank Offered Rate.
But for many, the term has never been more apposite. The revelation that Barclays rigged the rate – and the likelihood that other big name banks will soon be in dock over playing fast and loose with the rules – has solidified in many minds the image of the banker as a bloated fat cat living in a moral vacuum.
The local branch bank manager, who, with almost paternal care, guided individuals and businesses through life’s financial maze is now long gone, along with the friendly but firm policeman on the beat, the chirpy milkman, gruff butcher, baker and candlestick maker.

Buccaneering capitalism

Today’s bankers are at the cutting edge of buccaneering capitalism – an environment where the sole purpose is to make luminescent numbers on ranks of wafer-thin electronic screens get bigger and bigger. Inhabitants of the post-industrial, post-technological revolution economies are told – primarily by bankers themselves, but also by politicians and other inhabitants of the great-and-the-good tower – that we can’t live without them. That, indeed, water would cease to flow, the air would turn putrid with poison, the very earth would crack and swallow us all, if bankers and the mystifying world of high-finance were not allowed to get on with what they do almost totally unencumbered by regulation.
As our commentator points out this week, that approach may have shuddered to an undignified grinding halt with the resignation of Barclays’ chief executive, Bob Diamond.
The appropriately named banking boss tried his best to charm a UK parliamentary committee with a performance straight out of the top drawer of any media training charlatan’s day-one session. But this time bankers are their least impermeable since the days before the beginning of the reign of Reagan-Thatcher-Freedman free market economics. It may not be the case, but the perception is that rigging the Libor rate could have caused real people real grief.

Old-fashioned fraud

Recent financial services legislation might not see bankers sent down, but the good old-fashioned crime of fraud may well do the trick. And when small-time shop-lifters are increasingly pursued by major British high street brands – who insist the perpetrators either cough up hugely disproportionate fines or actually do prison time – the public mood is increasingly likely to accept the idea of white-collared, pin-striped bankers going behind bars. For many, justice will demand it.
Justice is also preying on the minds of the Russian authorities. They are fed up with sanctimonious voices preaching that their commercial courts are little more than corrupt arms of the rich and powerful, and with their oligarch litigants rushing to London to settle disputes. But, write another set of commentators this week, concerned Russian prospective litigants can take measures to ensure that they don’t have to settle disagreements in the lottery of that country’s domestic courts.